NEW YORK, Oct 5 (Reuters) - Silver investors may pursue a lawsuit accusing two major banks of conspiring to fix prices and exploit market distortions, affecting $30 billion traded each year in the precious metal and related instruments, a federal judge has ruled.

U.S. District Judge Valerie Caproni in Manhattan rejected efforts by Bank of Nova Scotia (“ScotiaBank”) and HSBC Holdings Plc to dismiss the lawsuit, in a decision made public on Tuesday.

Caproni also dismissed UBS Group AG as a defendant, saying there was nothing to show it manipulated prices.

Deutsche Bank AG settled related claims in April, and the investors plan soon to seek preliminary approval of a settlement, their lawyer Vincent Briganti, a partner at Lowey Dannenberg Cohen & Hart, said on Wednesday. Terms have not been disclosed.

Caproni also ruled in a separate decision that another group of investors may pursue gold-rigging claims against ScotiaBank, HSBC, Barclays Plc and Societe Generale.

In the silver case, investors accused Deutsche Bank, ScotiaBank and HSBC of rigging prices through a secret daily meeting called the Silver Fix.

They alleged that the conspiracy started by 1999, and enabled the banks, including UBS through its alleged ability to exploit the distortions, to pocket returns that could top 100 percent annualized.

In her 61-page decision, Caproni said the investors sufficiently, “albeit barely,” alleged that Deutsche Bank, HSBC and ScotiaBank violated U.S. antitrust law by conspiring opportunistically to depress the Silver Fix from January 2007 to December 2013.

Caproni gave the investors 14 days to amend their complaint, including against UBS. Briganti said they plan to do so.

The case is In re: London Silver Fixing Ltd Antitrust Litigation, U.S. District Court, Southern District of New York, No. 14-md-02573. (Reporting by Jonathan Stempel in New York; Editing by Frances Kerry and David Gregorio)